GBP/USD Fundamental Outlook at 1500 GMT (EST + 0500)

GBP/USD Fundamental Outlook at 1500 GMT (EST + 0500)

By IBT Staff Reporter On 06/05/09 AT 1:01 PM

The British pound weakened vis-Ã -vis the U.S. dollar today as cable tested bids around the US$ 1.5955 level and was capped around the $1.6240 level. Sterling continues to sell-off on escalating political uncertainty. A few of Prime Minister Brown€™s Cabinet members have resigned this week and there have been growing calls for Prime Minister Brown to step down as well. It appears Chancellor of the Exchequer Darling € himself ensnarled in the expenses scandal € will retain his portfolio. Brown has reshuffled his Cabinet and sterling is weaker on the premise that Brown will be forced out of office and the Tories will win the next election. Bank of England reported it has purchased ‚¤79.9 billion of securities through its asset purchase facility so far. Data released in the U.K. today saw May factory gate prices decline 0.3% y/y, the first yearly decline since 2002, while input prices were off at the fastest rate since 2001 at -42.2% y/y. Cable bids are cited around the US$ 1.5790 level. The euro moved lower vis-Ã -vis the British pound as the single currency tested bids around the ‚¤0.8730 level and was capped around the ‚¤0.8865 level.